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Supporting the Creative Economy

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Supporting the Creative Economy House of Commons Culture, Media and Sport Committee Supporting the creative economy Third Report of Session 2013–14 Volume I Volume I: Report, together with formal minutes, oral and written evidence Additional written evidence is contained in Volume II, available on the Committee website at www.parliament.uk/cmscom Ordered by the House of Commons to be printed 11 September 2013 HC 674 [Incorporating HC 743 (Session 2012-13)] Published on 26 September 2013 by authority of the House of Commons London: The Stationery Office Limited £35.00 The Culture, Media and Sport Committee The Culture, Media and Sport Committee is appointed by the House of Commons to examine the expenditure, administration and policy of the Department for Culture, Media and Sport and its associated public bodies. Current membership Mr John Whittingdale MP (Conservative, Maldon) (Chair) Mr Ben Bradshaw MP (Labour, Exeter) Angie Bray MP (Conservative, Ealing Central and Acton) Conor Burns MP (Conservative, Bournemouth West) Tracey Crouch MP (Conservative, Chatham and Aylesford) Philip Davies MP (Conservative, Shipley) Paul Farrelly MP (Labour, Newcastle-under-Lyme) Mr John Leech MP (Liberal Democrat, Manchester, Withington) Steve Rotheram MP (Labour, Liverpool, Walton) Jim Sheridan MP (Labour, Paisley and Renfrewshire North) Mr Gerry Sutcliffe MP (Labour, Bradford South) The following members were also a member of the committee during the parliament: David Cairns MP (Labour, Inverclyde) Dr Thérèse Coffey MP (Conservative, Suffolk Coastal) Damian Collins MP (Conservative, Folkestone and Hythe) Alan Keen MP (Labour Co-operative, Feltham and Heston) Louise Mensch MP (Conservative, Corby) Mr Adrian Sanders MP (Liberal Democrat, Torbay) Mr Tom Watson MP (Labour, West Bromwich East) Powers The committee is one of the departmental select committees, the powers of which are set out in House of Commons Standing Orders, principally in SO No 152. These are available on the internet via www.parliament.uk. Publication The Reports and evidence of the Committee are published by The Stationery Office by Order of the House. All publications of the Committee (including press notices) are on the internet at www.parliament.uk/cmscom. A list of Reports of the Committee in the present Parliament is at the back of this volume. The Reports of the Committee, the formal minutes relating to that report, oral evidence taken and some of the written evidence are available in a printed volume. Additional written evidence is published on the internet only. Committee staff The current staff of the Committee are Elizabeth Flood (Clerk), Grahame Danby (Second Clerk), Kevin Candy (Inquiry Manager), Emily Gregory (Senior Committee Assistant), Keely Bishop (Committee Assistant) and Jessica Bridges-Palmer (Media Officer). Contacts All correspondence should be addressed to the Clerk of the Culture, Media and Sport Committee, House of Commons, 7 Millbank, London SW1P 3JA. The telephone number for general enquiries is 020 7219 6188; the Committee’s email address is [email protected] Supporting the creative economy 1 Contents Report Page Conclusions and recommendations 3 1 Introduction 9 Creative industries 9 The Committee’s inquiry 10 Visits 11 2 Olympic and Paralympic legacy 13 3 Intellectual property 16 Copyright and piracy 16 Digital Economy Act 21 Proposals for change 23 Copyright exceptions 27 4 Funding and finance 33 5 Tax reliefs 37 6 Education, skills and training 41 7 Creative hubs 46 8 Creative Industries Council 47 Formal Minutes 49 Witnesses 50 List of printed written evidence 52 List of additional written evidence 52 List of Reports from the Committee during the current Parliament 55 Supporting the creative economy 3 Conclusions and recommendations Olympic and Paralympic legacy 1. We welcome the efforts of UKTI to promote the UK creative industries overseas and believe international trade missions should contain wide cultural representation. The greatest effort should continue to be directed towards ensuring that UK creative talent and businesses are assiduously promoted not only by UKTI but in all work to promote British business overseas. (Paragraph 14) 2. The excessive constraints imposed by the Olympic No Marketing Rights Protocol and the inadequacy of the Supplier Recognition Scheme mean that the benefits from the participation of UK businesses in the 2012 Olympic and Paralympic Games are not being properly realised. This deeply disappointing state of affairs endangers the economic legacy that British companies in the creative and allied sectors have a legitimate right to benefit from. It reflects badly on the wider Olympic movement that, in other contexts, is all too ready to celebrate individual and collective achievement. (Paragraph 17) 3. We recommend that the Government review, as a matter of urgency, whether the supplier recognition scheme can be improved to meet the objective of allowing British firms to promote their contributions to the 2012 Olympics and Paralympics. This is all the more pressing as firms throughout the UK seek to gain contracts for the next games in Rio de Janeiro. (Paragraph 18) Copyright protection 4. The relationship between the strength of Britain’s creative industries and robust copyright laws is acknowledged by the Open Rights Group which aims radically to liberalise the use and sharing of copyrighted content. While we share the Open Rights Group’s attachment to freedom of expression via the internet, we firmly repudiate their laissez-faire attitudes towards copyright infringement. (Paragraph 19) 5. We encourage businesses to use the current law to bring claims wherever it is feasible for them to do so. There nonetheless remains a systemic failure to enforce the existing laws effectively against rife online piracy. (Paragraph 28) 6. We strongly condemn the failure of Google, notable among technology companies, to provide an adequate response to creative industry requests to prevent its search engine directing consumers to copyright-infringing websites. We are unimpressed by their evident reluctance to block infringing websites on the flimsy grounds that some operate under the cover of hosting some legal content. The continuing promotion by search engines of illegal content on the internet is unacceptable. So far, their attempts to remedy this have been derisorily ineffective. (Paragraph 31) 7. We do not believe it to be beyond the wit of the engineers employed by Google and others to demote and, ideally, remove copyright infringing material from search engine results. Google co-operates with law enforcement agencies to block child pornographic content from search results and it has provided no coherent, 4 Supporting the creative economy responsible answer as to why it cannot do the same for sites which blatantly, and illegally, offer pirated content. (Paragraph 32) 8. There should be within Government a powerful champion of IP with a duty to protect and promote the interests of UK IP, to co-ordinate enforcement of IP rights in the UK and overseas and to educate consumers on the value of IP and the importance of respecting IP rights. Logically the IPO should take on this role. Yet too often it is seen as wishing to dilute copyright rather than defend and enforce it. (Paragraph 34) 9. We recommend that the Intellectual Property Office’s annual reports include an assessment of the degree of online copyright infringement and the extent to which identified search engines and other internet services facilitate this. We further recommend that the Government consider how it might incentivise technology companies to hinder access via the internet to copyright infringing material. (Paragraph 35) 10. We recommend that the maximum penalty for serious online copyright theft be extended to ten years’ imprisonment. Criminal offences in the online world should attract the same penalties as those provided for the physical world by the Copyright, etc. and Trade Marks (Offences and Enforcement) Act 2002. (Paragraph 37) Discouraging piracy 11. While the practical implementation of the Digital Economy Act continues to be delayed, millions of pounds are being lost by the creative industries with serious consequences for the wider economy. We urge the Government to resolve the current impasse on implementing the Online Copyright Infringement Code without further delay, and in response to this Report to set out a clear timetable for doing so. (Paragraph 41) 12. We recommend that a copyright infringement notification system envisaged by the Digital Economy Act be implemented with far greater speed than the Government currently plans. By targeting information letters to the worst infringers, early implementation will, we believe, serve an important educative purpose which could percolate more widely. (Paragraph 46) 13. We are encouraged by the progress that has been made towards instituting a voluntary system of warning letters following discussions involving internet service providers and rights owners. If this can be achieved by mutual cooperation rather than legislation, it will be a major step forward. However, should voluntary initiatives such as this prove unsuccessful then the Government should ensure that the equivalent measures in the Digital Economy Act are promptly put into effect. (Paragraph 47) 14. Following all the evidence we have received, we think Hargreaves is wrong in the benefits his report claims for his recommended changes to UK copyright law. We regret that the Hargreaves report adopts a significantly low standard in relation to the need for
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